The company claims its Office 365 cloud platform is winning converts from Google Apps

Microsoft is bolstering its cloud presence with its Office 365 cloud application suite and believes it has more to offer enterprises than Google has with its own online applications, a Microsoft executive said on Thursday.

Office 365 was announced last month, featuring such applications as Exchange messaging and SharePoint collaboration. While denying that Office 365 is intended to battle Google's online applications, Microsoft's Eron Kelly, senior director for Business Online Services Marketing, said in an interview that Microsoft has had business class users come to Microsoft after trying out Google Apps. The online search giant's applications lack vital capabilities, such as delegate access, which enables a user to let someone else manage their calendar, Kelly said. Directory integration also is lacking. "Things like delegate access, those are things you just must have for these organizations," Kelly said.

"I think Google represents an interesting consumer service. They put an enterprise name on it, and it's getting people interested," Kelly said. Microsoft, however, has seen users migrate from Notes to Google's applications and then approach Microsoft, said Kelly.

But a Google representative dismissed Kelly's claims. "The truth is our business is accelerating and our retention rate is actually [greater than] 90%," said Google spokesman Andrew Kovacs. More companies are switching to Google, such as Virgin America, than to Microsoft, he said.

Unlike Microsoft's previous cloud offering, Business Productivity Online Suite, Office 365 will feature the latest versions of Exchange, SharePoint, and the Lync communications server. The Office rich client and Office Web applications are featured as well.

Kelly pledged a seamless experience with Office 365 across the PC, phone and browser. Office 365 currently is in a controlled beta release cycle, with general availability planned for 2011. Kelly also said the price points of Office 365 will enable Microsoft to add users who previously could not afford the company's applications. Prices for Office 365 will start at $2 per user per month for basic email.

For partners who want to extend the Office 365 applications, they can write code and utilize Web services to interact with Office 365, Kelly said.

Earlier in the day, Kelly pitched Office 365 at the Cloud Computing Conference & Expo in Santa Clara, Calif. "First and foremost, Office 365 is really about productivity," Kelly said. Cloud-based applications also offer environmental benefits, he said. "Even for large businesses, they can expect to see a 30% reduction in their CO2 emissions when they move their apps to the cloud," Kelly said.